Farrell, Barr Planning to Leave Obama Administration's Economic Team

By Nicholas Johnston -
Nov 23, 2010

Diana Farrell, deputy director of
President Barack Obama’s National Economic Council, and
Assistant Treasury Secretary Michael Barr are leaving the
administration, adding to the turnover in the ranks of the White
House economic team that worked on the government’s response to
the worst financial crisis in more than 70 years.

Farrell will leave by the end of the year and Barr’s last
day at Treasury will be Dec. 3. Both played key roles in shaping
Obama’s financial regulatory overhaul plan, which was signed
into law in July.

“I am deeply grateful for the opportunity to serve
President Obama and the country,” Farrell said in a statement
yesterday. “It was a privilege to work with such a fine group
of people at the White House and across the administration.”

Farrell’s boss at the NEC, Lawrence Summers, announced in
September that he would return at the end of the year to Harvard
University.

Summers said Farrell “played a central role” in the
administration’s efforts to respond to the housing crisis,
restructure the auto industry and encourage economic growth.

“Her natural talent as a policy maker and her good
judgment made her invaluable in setting a course for economic
recovery,” Summers said in a statement.

‘Key Architect’

Treasury Secretary Timothy F. Geithner described Barr as
“a key architect” of the financial regulatory overhaul
legislation. “Our country is stronger, our financial system
more stable, and our families better protected because of his
work,” Geithner said.

Farrell did not indicate in her statement what she planned
to do. Treasury spokesman Steve Adamske said Barr would continue
his academic career at the University of Michigan in Ann Arbor.

Adamske also said yesterday that Matthew Kabaker, who heads
the Office of Capital Markets and Housing Finance, is leaving as
well. Kabaker, who helped devise the Treasury’s plan to spur
banks to sell their toxic assets, is a former executive at
Blackstone Group LP. He will be returning to New York, where his
family lives, Adamske said.

Obama and his economic team have been battered by the slow
economic recovery and an unemployment rate that has been at 9.5
percent or higher for more than a year. The economy was a top
issue in the Nov. 2 midterm congressional elections in which
Republicans won control of the House of Representatives and
narrowed the Democratic majority in the Senate.

A New Team

Obama is remaking his economic team following other
departures including Peter Orszag, director of the Office of
Management and Budget, and Christina Romer, head of the Council
of Economic Advisers.

Austan Goolsbee, Romer’s deputy, took over at the Council
of Economic Advisers, and Jacob Lew, who headed the White House
budget office during the Clinton administration, has been
confirmed as Orszag’s successor.

Roger Altman, founder of Evercore Partners Inc. and a
former deputy treasury secretary, is a leading candidate to
succeed Summers.

Farrell, 45, is a former director of the McKinsey Global
Institute, the economics research arm of McKinsey & Company. In
naming her to the administration last year, Obama said she would
focus on programs to “jump-start economic growth,” while
promoting “the long-term investments in our economy necessary
to save and create jobs, rebuild our infrastructure, and assure
energy independence.”

She received her undergraduate degree from Wesleyan
University in Middletown, Connecticut, and a master’s degree
from Harvard Business School in Cambridge, Massachusetts.

Barr, also 45 and a former law professor, pushed the
administration’s case for the Dodd-Frank financial overhaul in
the months before it was signed into law in July. He had been a
candidate to lead the Consumer Financial Protection Bureau
created by the law.

Before joining the administration, he was a senior fellow
at the Center for American Progress and at the Brookings
Institution in Washington. A former Rhodes Scholar, Barr
received both his undergraduate degree and his law degree from
Yale University in New Haven, Connecticut.